Thrift opposition to the proposed merger between America's Community Bankers and the American Bankers Association is emerging.

In the Midwest, Heartland Community Bankers Association, a trade group representing 45 thrifts with $30 billion of assets, said it will not support the merger unless a list of tough demands are met, including a promise that the combined group will protect the mutual thrift charter, commercial ownership of thrifts, and the Office of Thrift Supervision.

"Trust is like a piece of glass," said Heartland president James R. Turner in a letter Friday to ACB chairwoman E. Lee Beard. "Once broken, it can never quite be the same. ACB has broken trust with the thrift induIn the South, the Community Bankers of Louisiana, which represents 31 thrifts and 77 community banks, sent a similar letter to Ms. Beard. Daniel P. Digby, president of the group, called the missive a "first shot across the bow."

In the Northeast, the six-state Community Bank League of New England, which represents about 100 thrifts and 10 commercial banks, decided last week to affiliate with the Independent Community Bankers of America.

"We're just following the lead of our members," said League president Donald S. Glass. "We look at this as an opportunity to broaden our perspective on the world, and cover our bases."

The brewing revolt among thrifts may come to a head next month. On Sept. 16 and 17, executives from approximately one dozen regional and state thrift associations will meet in St. Louis to discuss the possibility of hiring a Washington lobbyist. Gordon "Bud" Smith, president of Liberty Federal Savings Bank in Enid, Okla., said the groups will discuss what to do if the ACB-ABA merger is not to their liking.

"Walking away from a national trade group is pretty serious stuff, and there's got to be very, very solid grounds for doing that," said Mr. Smith, who is also a member of the ACB's board. "(But) we felt we needed a contingency plan."

"This is really getting divisive," Mr. Digby said.

In an interview, Ms. Beard projected calm about Mr. Turner's letter and other recent examples of concern, and cautioned that no decisions have been made about the structure of the proposed merger.

"There have been questions, and people want to understand as completely as they can what the organization might look like," said Ms. Beard, who is president of First Federal Bank in Hazleton, Pa. "We are certainly taking all of that into consideration."

The ACB and the ABA announced in mid-July their intent to merge. After their boards voted to move forward with the process, each assigned four officials to survey their members, design a possible structure for the merged entity, and issue a study by yearend.

ACB and ABA also have hired consultant Towers Perrin -- for a fee that could reach $850,000 -- to help facilitate the process. At least half a dozen bank and thrift trade groups have merged at the state level in recent years.

Mr. Digby's group, the Community Bankers of Louisiana, represents the merger of that state's community banking group and the Louisiana League of Savings Institutions several years ago. He said the merger was surprisingly straightforward, although the two groups tussled over the issue of unitary thrifts.

An attempted merger between the California Bankers Association and the Western League of Savings Institutions failed. "We just weren't able to bridge the political differences," said Louis H. Nevins, president of the Western League.

Ditto the 1993 merger talks in Oklahoma between bank and thrift trade groups. "There was no real, serious interest in having us be part of either organization, except for taking our money," said Mr. Smith. "All that skepticism goes forth into this process as well -- kind of a 'been there, done that' feeling."

Size is a primary concern of many thrift executives.

"There's going to be some community thrift institutions that are going to feel like they just can't associate with this new organization because of the asset size of the members it represents, and because of the sheer size of the new organization," Mr. Digby said.

In fact, he predicted the ACB-ABA merger could lead to a windfall for the Independent Community Bankers of America. "My small thrift institutions are, by asset size and operating philosophy, much more akin to community bankers. Their 'alternative,' " he said, "is to go to the ICBA."

ABA president R. Scott Jones did not return a call for comment.

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